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Stamp Duty: All Your Questions Answered

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Stamp Duty: All Your Questions Answered

Stamp duty refers to a tax that you must pay on particular documents or transactions. One of these transactions being when you purchase a property.

Stamp duty is an unavoidable tax that all home-owners must pay, but many home-owners still struggle to fully understand.

Don’t stress! We’ve got you.

Here is a comprehensible breakdown of what Stamp duty is, how much it costs, and how to pay it.

What is stamp duty?

Stamp duty, also known as transfer duty is a tax you pay when purchasing a house. The exact amount varies dependant on state and territory, but on average: Australians pay tens of thousands of dollars on stamp duty, and that’s in addition to mortgage, loans and deposit.

Who pays stamp duty?

In real estate stamp duty is payed by the buyer of a property.

How much do I have to pay?

The cost of stamp duty varies dependant on state and territory. Some states offer concessions to first time buyers as well as people who are purchasing homes in regional areas.

The amount you must pay will also vary dependant on:

  • The cost and type of property you are purchasing
  • Whether or not the home you are buying is classified as an established home, a vacant home or a new home
  • If you are an Australian citizen, permanent resident or a foreign purchaser.

Some states and territories will also offer reduced tax rates dependant on property value.

In Victoria, first home buyers will be entirely exempt from stamp duty so long as the property they purchase costs less than $600,000. There are also reduced rates for those purchasing a home priced between $600,001 and $750,000.

Exemptions?

Exemptions for stamp duty are again dependent on state and territory. In Victoria pensioners are exempt from stamp duty if their property is valued up to $330,000, and partial concession is available for pensioners who’s property is valued between $330,001 and $750,000.

How do I pay stamp duty?

State and Territory governments generally accept payments online, via credit card, cheque, or bank transfer.

When do I pay stamp duty?

Just as rates vary from state to state, so does the the timeframe in which the payments must be made. Below is a guide to the average payment time dependant on state or territory:

NSW: Payable within 3 months.

TAS: Payable within 3 months.

VIC: Payable within 30 days of property transfer.

SA: Payable on settlement day.

NT: Generally payable within 60 days.

WA: Payable within two months

ACT: Payable within 28 days of settlement, and 14 days after ‘Notice of Assessment’.

Where does the tax money go?

Tax money collected by states and territories is invested back into the economy. The revenue is invested in government budgets and covers: health, education, roads and railways and emergency services.

We hope you found this guide to stamp duty helpful! Purchasing a new house is extremely exciting, but make you thoroughly understand taxation before entering into a contract for a new property.